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Italian firms ‘could get German state loans’

Small business owners in Italy could soon be eligible for German government loans, as part of a plan by German Finance Minister Wolfgang Schäuble to help support southern European economies hurt by the eurozone crisis.

Italian firms 'could get German state loans'
Wolfgang Schäuble (file photo).

If Schäuble's plan goes ahead, a credit scheme already planned for small and medium-sized enterprises (SMEs) in Spain would be extended to cover Portugal and Italy, he was quoted as saying Sunday.

Under the Spain programme, which Schäuble recently presented to parliament, Germany's KfW public investment bank will offer €800 million  (about $1 billion) in loans to businesses via Spain's ICO bank. 

"I have told my Portuguese colleagues already: you can have all this too," Schäuble was quoted as telling weekly business magazine Wirtschaftswoche.

The report said Germany would extend the same offer to Italy.

Schäuble is set to meet the Italian and French finance and labour ministers in Rome on Friday.

The report said launching the programme for Greece would initially be more difficult because it lacked a similar development bank, although a partner institution could be set up.

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BUSINESS

Volvo profits plummet on rising material costs

Swedish automaker Volvo Cars said on Thursday that rising raw material costs and inflation had driven down profits in the third quarter.

Volvo profits plummet on rising material costs

The group posted a net profit of 665 million kronor ($61 million) in the July-September period, a drop of 71 percent compared to 2.3 billion kronor during the same quarter a year ago.

The figure was far below analysts’ forecasts of between 2.15 and 2.19 billion kronor, according to Bloomberg and Factset.

The company’s share price was down by around seven percent in midday trading on the Stockholm stock exchange.

Chief executive Jim Rowan said the company was hit hard by rising raw material prices, record inflation, higher interest rates and the war in Ukraine.

“The macroeconomic uncertainties around the world weighed on our third quarter performance”, he said in a statement.

Revenue meanwhile rolled in slightly higher than analysts’ expectations, rising by 30 percent to 79.3 billion kronor, boosted by “robust” demand for the company’s SUVs.

Analysts had predicted third quarter sales of between 78.1 and 78.7 billion kronor.

Retail sales declined however in some markets, including its main markets Europe and the United States, where the number of vehicles sold fell by 14 and 32 percent respectively.

The carmaker insisted however that its order book remained solid.

Volvo Cars, which aims to have an all-electric fleet by 2030, also reported “sharp pick-up” for its fully-electric vehicles at the end of the quarter, especially in September.

It said sales of fully-electric cars soared by 87 percent in the third quarter, accounting for seven percent of its total sales during the period.

The company, a subsidiary of Chinese group Geely, said manufacturing output continued to improve in the third quarter, but “unforeseen factors” such as power outages and Covid-19 related lockdowns in China “slowed down the pace of normalisation”.

It expected production, wholesale and retail growth in the second half of the year.

“For the full year 2022, we expect slightly lower wholesale volumes than 2021, assuming no further major supply chain disturbances. Wholesale and retail volumes will be on similar levels”, it said.

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